Massachusetts adds slot machines as Australians debate “pokie” problem

Australia has 1/5 of the world's slot machines. What lessons does it hold for tiny Plainville, MA?

By Nicholas Nehamas

Forget Texas Hold ’em. Slot machines are the new craze in American gambling. Record slot machine revenues helped Pennsylvania pass New Jersey as the nation’s second-biggest gambling market. Here in Massachusetts, the state wants in on the action too — last November, Gov. Deval Patrick okayed the creation of a single slot machine parlor, its location to be decided by a public bidding process.

Harness racing at the Plainridge Racecourse, which hopes to add slot machines and a hotel to the track. Management has promised increased revenue and employment opportunities for Plainville but some residents are concerned about gambling addiction (Courtesy/Plainridge Racecourse)

Now, a harness racing track in Plainville, Mass., less than an hour’s drive from Boston, has announced it wants to bring 1,250 slot machines to this town of 7,000 people. Management at the Plainridge Racecourse told the Boston Globe that it needs the slots to survive as interest in harness racing declines, and that the project will provide tax revenue and steady jobs. A final decision won’t be made for months. The state gaming commission only met for the first time on April 11 and hasn’t yet finalized the licensing process for slots. Moreover, Plainville residents will have to vote in favor of the racetrack’s proposal before it can be approved.

When Latitude News heard about this story, the first thing we thought of was a question from one of our readers, who sent us this tweet in response to our piece on a casino in Foxboro, MA:

 

Well, Martha, for slots there’s no better place to turn than Australia.

Pokies Down Under

Aussies love a wager. Last year they spent around $23 billion on gambling, the highest per capita in the world. At least half of that was bet on slots, or “pokies,” as Australians call them (it’s short for poker machines). The country currently has more than 200,000 machines in at least 1,500 different venues. That’s a fifth of the world’s total.

“They’re ubiquitous,” says Christopher McAuliffe, Visiting Professor of Australian Studies at Harvard University. “They’re in local bars, clubs, hotels. If I walked out my front door [in Melbourne], a hundred yards down the street there would be a pub and a room with maybe 30 electronic gambling machines.”

But these contraptions aren’t the one-armed bandits of yore, where you pull a creaky handle and hope for three-of-a-kind. Modern slots are like flashy, hi-tech video games that play music and scenes from TV shows. Some let you place a bet every three-and-a-half seconds.

A patron smiles as she plays with “The Phantom” at a club in Sydney November 23, 2011. Pokies aren’t all fun-and-games though. Experts say they can be highly addictive. “You can play for 24 hours a day if you want,” says Dr. Alex Blaszczysnki, an Australian professor of psychology. “The only thing stopping you is fatigue and lack of money.”

The “Crack Cocaine” of Gambling?

People who gamble on slots do it even though they’re almost guaranteed to lose. Playing the “pokies” isn’t like sitting down to a game of blackjack or seven-card stud, where you know the odds and have a reasonable idea of what the house is holding. A slot machine is like a coin flip. Nothing you can do will change the chance that you’ll win. In Australia, pokies are guaranteed by law to pay out 87 percent of what you put in. Yes, that means if you put in a hundred dollars, you’re promised eighty-seven back. The house keeps the difference.

“In all but the most extraordinary cases winning [over the long term] is impossible. But the random nature of these machines makes people think they’re just one twirl away from a jackpot,” said Dr. Alex Blaszczysnki, head of the School of Psychology at the University of Sydney and an expert on gambling behavior, in an interview with Latitude News.

Scientific research suggests gambling triggers dopamine centers in the brain, just like habit-forming drugs, and slots are the most addictive of all. Enthusiasts who stop playing can experience symptoms of physical withdrawal.  As a result, some experts have compared slots to “crack cocaine.”

Trouble in Plainville

Naturally, concerns about addiction and crime have popped up in Plainville. Slot machines are “a breeding ground for problem gambling,” says Mary-Ann Greanier, co-founder of No Plainville Racino, a local anti-slots group. “We’re not talking about morality here. It’s about children not getting fed because their parents are addicted to gambling. It’s about people beating their spouses, or not having enough money to buy food. It’s a thread. Once you start tugging on it, our whole town unravels.”

Prof. McAuliffe’s grandfather was a bookie. His brother raced greyhounds. He says he has no moral objection to gambling. But for him, the parallels between Plainville and his homeland are clear: “As an Australian, the first thing you think of on seeing this story in Massachusetts is that government will come to depend on these machines [for revenue] while ordinary people, the people who can least afford it, will lose their money.”

In America and Australia, the relative number of problem gamblers is similar, ranging from between 1 to 5 percent of the total population depending on the criteria of the study. These problem gamblers are much more likely than non-problem gamblers to divorce, suffer from depression, abuse alcohol, engage in criminal activity and commit suicide.

Problem Gamblers: A Cash Cow for Casinos

Even though their numbers aren’t huge, problem gamblers still lose an incredible amount of money – and casinos would hardly be as profitable without them. A 2004 study in Ontario found that people with a moderate to severe gambling problem provided 36 percent of casino revenue there. A similar study in Australia found that around 40 percent of the gambling industry’s profits come from people who are addicted to pokies. On average, problem gamblers in Australia each lose $21,500 a year. They’re also a lucrative source of revenue for Australia’s states, which cannot impose an income tax.

Protesters hold banners and shout slogans as they march on the New South Wales state parliament in Sydney October 1, 2003. Around 10,000 people protested the state government’s planned tax on poker machines, claiming that the tax would signal the end of community services provided by registered clubs and threaten many national Rugby League teams. REUTERS/David Gray

Australia recognizes it has a problem with pokies. The government there recently introduced what it called “pre-commitment reform,” a law limiting the amount gamblers could spend on each session with a pokie. But the gambling industry launched a $3.5 million media campaign against vulnerable government MPs, calling the law “un-Australian.”

Most pokies are operated by neighborhood clubs, not casinos. Some of these clubs are small and family-owned. Others are huge and run by the country’s biggest rugby teams. Either way, they are a popular destination for Australians looking to kick back, have a beer and, yes, play the pokies. Gambling industry groups argue that pre-commitment will eat into the clubs’ profits, killing jobs and lowering government revenues. Clubs, they say, are at the heart of Australian social life and do important charitable work.

Not everyone agrees. Prof. McAuliffe believes that “the spending of gambling revenue on the community is a fig-leaf. It’s not like they’re going out to homeless shelters. They’re building bigger sports facilities and calling it a social benefit.”

Nonetheless, the government delayed further discussion of reform until May. A pre-commitment trial will begin in just one region, the Australian Capital Territory, starting in February 2013.

Dangers of the Nanny State

Tuned In and Talking
“Are there any countries that allow gambling but regulate in the way pre-commitment reform would work? [more]

Even someone as familiar with problem gambling as Blaszczysnki admits that pokie reform is a difficult issue. “It’s a question of civil liberties,” he says. “If you impose mandatory pre-commitment on gambling, say 200 dollars a month, why not extend the commitment to alcohol and limit people to four drinks a day? You’d have a significant social benefit . . . [then] what about fast food? You’d see a general creep into a highly regimented 1984 or Brave New World scenario.”

What questions would you like to see answered about gambling across the globe?

Discuss this

Tuned In and Talking: Reader Responses

“Are there any countries that allow gambling but regulate it in the way that pre-commitment reform would work?”~Joya Misra

From the editors: We’ve looked into your question about pre-commitment legislation. Norway is the one country that has mandatory pre-commitment where people can only use slots with a pre-paid electronic card. Read more here.

Tuned In and Talking features reactions from Americans affected by our stories.

  • Martha Bebinger

    Thanks Nicholas – lots of great stuff here. What I still want to figure out is, if slots are addictive, should the state regulate them as it does tobacco or drugs?

    • Nick_Nehamas

      That’s a great question, Martha, and a difficult one to answer. Slots are certainly addictive, and the social costs of problem gambling are high. Moreover, the industry makes a good deal of its money on problem gamblers. in some sense, blackjack and roulette tables are just the “window-dressing” for the slots, where the real cash comes from.

      But, as Australia has discovered, finding workable and effective regulations isn’t easy. And the gambling industry will fight back tooth-and-nail.

      One sensible reform would be to make sure that Australian-style machines (ones where you can bet–and lose–a lot of money very quickly) aren’t allowed into the US. These are the big money-makers for casinos and the big money-losers for patrons. Here’s an opinion piece from the Sydney Morning Herald that deals with the distinction between these “high-impact” machines and the “low-impact” models on which you can’t bet as much money: http://www.smh.com.au/business/even-americans-shun-our-addictive-pokies-20110929-1kzfo.html

      And here’s a long but good read from a Philly paper on Pennsylvania’s decision to bring in slots: http://archives.citypaper.net/articles/2009/01/08/foxwoods-sugarhouse-pennsylvania-gaming-control-board

      I’d be curious to hear your thoughts, Martha. What side are you leaning towards? Regulating slots or letting them be?

  • Tom Stites

    When legalized gambling in the U.S. escaped from Las Vegas, and state after state started lotteries, much of the political debate was grounded in moral questions. Morality has all but disappeared from the discourse, but moral questions remain.

    Essentially, lotteries and slot machines are taxes on people who don’t understand probability. This is most people, but the impact is greatest on the poor, desperate and addicted — and thus gambling is a deeply regressive, as well as deceptive, tax. State government officials frame gambling in terms of helping schools and local governments, but for the most part what they’re really doing is preying on the powerless because it’s easier than summoning the political courage to raise revenue from people with more political clout. We’re the citizens of these states, so this is being done in our name. This galls me.

    So: In Australia, and elsewhere in the world, is morality part of the political discourse about gambling? Are there religious voices in opposition?

    • Nick_Nehamas

      Thanks for the comment, Tom. Morality is still very much on the table in Australia. One of the major anti-gambling groups there is UnitingCare Australia, which is organized by the Uniting Church of Australia (a union of the Congregationalist, Methodist and Presbyterian churches), the country’s third largest: http://www.unitingcare.org.au/

      They’ve formed a task force on gambling with other churches. You can read more here: http://gamblingreform.org/

      How would you go about regulating slots?

      • Stephanie Holt

        Excellent point, Nick. Though the link with these churches these days is perhaps less about gambling itself being immoral (we Australians have generally had a cheerful tolerance for ‘traditional’ gambling) as a Christian concern for the welfare of the least fortunate, and the reality that church-based welfare and charitable services are often the frontline in repairing the damage wrought by problem gambling.

        • Nick_Nehamas

          thanks for the clarification, Stephanie. Yes, every Australian I’ve talked to has made sure to emphasize how important gambling is to their culture. Traditionally, it’s a very social and widely accepted activity. but as you say morality does come into the picture when club/casino gambling becomes a “predatory” phenomenon

    • Nick_Nehamas

      Hi Tom,

      Just wanted to add that last week I attended a panel on gambling hosted by the Boston Globe. The discussion was interesting but revolved completely around taxes, revenues, jobs, traffic, crime etc. This despite the presence of a Catholic priest and a No Casino in Suffolk Downs activist on the panel. Gambling addiction came up very briefly at the end and predatory gambling was not mentioned once.

      As it struggles in the wake of the recession, Massachusetts is looking at these casinos almost exclusively as a tool for revenue creation. Opponents, meanwhile, tend to be locally based neighborhood activists worried about increased crime, drunk driving, drugs, prostitution. This speaks to your point about morality being off the table in discussions about gambling.There are exceptions however. Here’s a story from a local paper on clergy members who opposed the casino in Foxboro: http://www.foxbororeporter.com/articles/2012/01/20/news/10834208.txt

      Sincerely,

      Nick

  • Susan Glimcher

    You raise and address a lot of complex and interesting issues, Nick. I think usually in these situations regulation works better than prohibition (the most notorious example I suppose being “Prohibition”!). I think it is extremely innovative, and takes full advantage of the interactive possibilities of the Internet in a way I haven’t seen in other online publications, to ask your readers for their thoughts and ideas – not just a blog but a true many-sided in depth discussion.

    • mariabalinska

      Hi Susan
      Thanks very much for your comment. Banning gambling isn’t terribly effective. Last year the Chinese lifted a 60 year ban on horse racing although you can’t bet on the horses – you have to go to Macau or Hong Kong to do that!
      http://www.reuters.com/article/2011/06/11/us-china-horseracing-idUSTRE75A0K220110611
      Glad you like our interactive approach. Let us know what interests you in our other pieces too.

  • Stephanie Holt

    Pre-commitment might offer a way to leave decision-making with the gambler while mitigating the effects of a machine/environment that (as the gambling industry is well aware) is designed precisely to override rational decision-making.

    As more and more pokies licenses are granted in states like my home state (Victoria), which for many years had none, their potential to be an income stream to sustain things like local pubs and community-based sports and social clubs seems to have been massively overstated, often with sad results not only for the gamblers but for the organisations and communities that were supposed to be beneficiaries.

    For a light-hearted look at some of those issues, have a look at the 2002 Australian film “Crackerjack”, that looks at the efforts to revive a declining local lawn bowls club while resisting the incursion of pokies. (I used to bowl at the club used as a location. They introduced pokies at one point, but I believe they’ve since been abandoned – certainly the club has worked hard to develop many new – and much more socially responsible and valuable – ways to remain a viable community asset.)